India Services Industry Shows Growth

BANGALORE, India — Activity in India’s huge services industry during May expanded for the first time in nearly a year, driven by a surge in new business, a survey showed on Wednesday.

The HSBC services purchasing managers’ index, compiled by Markit, rose to 50.2 in May from 48.5 in April, the first time since June 2013 that it has been above the 50 mark that divides growth from contraction.

A landslide election victory for Narendra Modi and his Bharatiya Janata Party, which created India’s first majority government in three decades, has propelled expectations for economic reforms. That optimism showed in the new business subindex, which rose to 50.5 in May, also the highest since last June.

Inflation has eased this year. The Reserve Bank of India’s governor, Raghuram Rajan, opted to keep the central bank’s key rate unchanged at 8 percent on Tuesday, as expected, after a series of rate increases.

Indian factory activity expanded at a slightly faster pace in May, while input prices rose at their slowest rate in over a year, a similar business survey showed on Monday.

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